Contrasting Silicon Motion Technology (NASDAQ:SIMO) and NXP Semiconductors (NASDAQ:NXPI)

Silicon Motion Technology (NASDAQ:SIMO) and NXP Semiconductors (NASDAQ:NXPI) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

78.0% of Silicon Motion Technology shares are held by institutional investors. Comparatively, 90.5% of NXP Semiconductors shares are held by institutional investors. 5.3% of Silicon Motion Technology shares are held by insiders. Comparatively, 0.1% of NXP Semiconductors shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Silicon Motion Technology pays an annual dividend of $1.99 per share and has a dividend yield of 3.3%. NXP Semiconductors pays an annual dividend of $4.05 per share and has a dividend yield of 1.7%. Silicon Motion Technology pays out 113.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NXP Semiconductors pays out 37.4% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Silicon Motion Technology and NXP Semiconductors”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silicon Motion Technology	$774.69 million	2.66	$52.87 million	$1.76	34.74
NXP Semiconductors	$13.11 billion	4.57	$2.80 billion	$10.83	21.63

NXP Semiconductors has higher revenue and earnings than Silicon Motion Technology. NXP Semiconductors is trading at a lower price-to-earnings ratio than Silicon Motion Technology, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Silicon Motion Technology has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, NXP Semiconductors has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Silicon Motion Technology and NXP Semiconductors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silicon Motion Technology	1	0	8	0	2.78
NXP Semiconductors	1	6	12	0	2.58

Silicon Motion Technology presently has a consensus price target of $85.56, suggesting a potential upside of 39.93%. NXP Semiconductors has a consensus price target of $294.89, suggesting a potential upside of 25.89%. Given Silicon Motion Technology’s stronger consensus rating and higher probable upside, equities analysts clearly believe Silicon Motion Technology is more favorable than NXP Semiconductors.

Profitability

This table compares Silicon Motion Technology and NXP Semiconductors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Silicon Motion Technology	10.14%	10.31%	7.79%
NXP Semiconductors	21.21%	35.65%	13.51%

Summary

NXP Semiconductors beats Silicon Motion Technology on 11 of the 16 factors compared between the two stocks.

About Silicon Motion Technology

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the FerriSSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.

About NXP Semiconductors

NXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. Its products are used in various applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Taiwan, and internationally. N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.